Europhile push for UK to enter the Euro

Today's DT business headline, "Britain's debt is now a riskier proposition than Italy's" means we can expect a new push for the UK to abandon Sterling and join the Euro. The factual basis of the article is that the yield on 10 year gilts exceeded that on 10 year Italian BTPs yesterday in intra-day as fears over Britain's financial credibility in money markets increased.

Despite the massive QE programme of money printing and gilt buying by the Bank of England which should have reduced gilt yields, since March gilt yields have increased by more than 100 basis points. At current levels this increases UK government long term debt servicing costs by 25%. The credit rating agencies have warned unless drastic action is taken soon to cut government spending the UK credit rating currently AAA will be downgraded and interest payments by us the taxpayers to service government debt will increase. Hedge funds have already sold short some £35bn of gilts in anticipation of gilt prices falling and gilt yields rising. The so called independent BoE continues to do the government's bidding and prints even more money.

The bond market as I have said frequently is sovereign as is the associated FX market. As a market's man I am not a great believer in economic theory but the very simple truths of supply and demand. If you increase the supply of Sterling and demand for Sterling by Jonny Foreigner falls on the market the the Sterling exchange rate against the Euro and Dollar will fall. The a huge cry of, 'We told you so. If we had joined the Euro this would not have happened to us etc etc', will arise from the 'philes led by that paragon of objective journalism the Beeb.

For someone like me who worked for the Government in 72 and 73 when Heath sold us out to the EU its the same argument repeated. Then Heath, in the face of opposition from organised labour especially the miners, could not run the country so we handed it over to the smart Jonny Foreigners in Brussels who did not have these strike problems and who knew how to run our country better than we did. Its deja vu all over again as Dubya said.

The truth is all is not hunky dory in Euroland with unemployment of 20% plus in Spain, Greece and indeed all of Club Med. The root of our problems lies in our rotten party political system which does not represent the real views of the UK populace and is dominated by a self seeking political elite that responds only to special interest groups. Special interest groups however do not pay the bills. That is done by middle England so let us have a little more of he who pays the piper call the tune and a lot less political correctness especially the smearing of decent people as Islamophobes or racists when they speak out in support of traditional British values of decency and fair play.